Wall Street analysts weigh in on Apple's Macworld announcements

Wall Street's usual suspects have started to weigh in on Apple's Macworld announcements, with most speaking favorably of what company chief executive Steve Jobs laid out on Tuesday. However, at least one analyst was skeptical about the potential for the new MacBook Air.

Shaw Wu, an analyst with American Technology Research said iTunes Movie Rentals may end up being a bigger deal than some expected.

"On the surface, the announcements look underwhelming and somewhat expected; however, we think when looking back several years from now that the iTunes Movie Rentals announcement will likely end up being a landmark event and potential game-changer," he wrote. "We think movies will ultimately help in driving more users to the Apple platform (iTunes, iPod, iPhone, Mac, Apple TV). In fact, this announcement reminds us of the launch of the iTunes Music Store back in late April 2003 which helped ignite a multi-year 'digital music cycle'. We believe we may be at the beginning of a 'digital video cycle' where there is a fundamental paradigm shift to online video from physical DVDs. In our view, Apple is well-positioned to become a key destination for movies much like it is for music, music videos, and TV shows.

The analyst, however, was a bit cautious in predicting that the MacBook Air would also be a smash hit, saying it may share a bit too much in common with Apple's other notebook offerings, yet provide only limited differentiation in terms of compelling new features.

"While we are impressed with the new MacBook Air and its industrial design, it is not as clear if it will drive incremental buying as has Asus' Eee sub-notebook," he told clients. "To us, there may be too much overlap with its existing MacBook and MacBook Pro. But then again, Apple has proven fairly adept with product placement, most recently with iPhone and iPod touch where there has been minimal cannibalization despite overlapping functionality."

The AmTech analyst added that while Apple shares have been pressured with the technology sector due to macroeconomic concerns, he believes the company is well-positioned to weather the storm better than most with its strong fundamentals.

"We see upside to [our] $210 [price target] in 6-12 months," he wrote.

Over at Piper Jaffray, analyst Gene Munster was bit more bullish on the MacBook Air, saying he believes the super-slim notebook should fuel market share games for the Cupertino-based Apple, helping the company garner an additional 20-30 basis points of global PC market share in 2008.

Apple should also see incremental hardware sales due to the recent addition of iTunes Movie Rental content, according to Munster.

"The consumer's desire to enjoy content whenever and wherever is a clear trend in digital media," he wrote. "We believe that the ability to rent movies on iTunes for $2.99-$3.99 will drive significant interest in Apple's entertainment ecosystem. This ecosystem now includes the Apple TV, iPod and iPhone. Because of the integration of these devices, consumers can be certain that by purchasing Apple devices they can view their content whenever and wherever. Moreover, as people invest in digital media libraries, Apple customers can be assured that their devices will work with newly released content in the future."

Munster maintained his Buy rating and $250 price target on shares of the company.

Ingrid Ebeling, an analyst with JMP securities, shared a similar view on Apple's Macworld announcements, explaining to clients in a research note that she believes Apple continues to stay ahead of the curve and deliver what consumers want.

"We believe Apples ability to seamlessly integrate digital media from the Internet onto consumer devices, including HDTVs, will continue to drive market share growth of its Mac business," she wrote.

The analyst reiterated her our Market Outperform rating and $210 price target on shares of the company.

It appears that I am in the minority but I don't see the benefit of paying $3-4 to rent a movie that has to be watched within 24 hours especially if I want to view it more than once, I may as well pay the $10 and buy it.

Also not being able to put it on both the Apple TV and iPod make buying the better deal.

If the rentals were $1-2 and the viewing time were much greater than 24 hours (at least a week) they would have a greater appeal to me.

I hope that Fox and other studios that are providing rental-only films will eventually allow us to purchase them as well.

It appears that I am in the minority but I don't see the benefit of paying $3-4 to rent a movie that has to be watched within 24 hours especially if I want to view it more than once, I may as well pay the $10 and buy it.

Also not being able to put it on both the Apple TV and iPod make buying the better deal.

If the rentals were $1-2 and the viewing time were much greater than 24 hours (at least a week) they would have a greater appeal to me.

I hope that Fox and other studios that are providing rental-only films will eventually allow us to purchase them as well.

-eric

you have 30 days to watch the movie...once played, you have 24 hours to complete viewing. Hardly a limiting model given how most people rent movies. I suppose it's not as free as the netflix model (keep it until you return it)...but this is very similar.

also, what do you mean "not being able to put it on both the Apple TV and iPod"? The movie rental concept demoed (maybe I'm wrong here) via Take 2. And, I think I remember Jobs saying that you _can_ transfer the video to any current generation iPod/iPhone.

edit: By the way, where in the world can anyone rent a movie for $1-$2?

an aye for an eye, the truth is a lie; a fish cannot whistle & neither can I.

I want to view it more than once, I may as well pay the $10 and buy it.

Most people watch a film ONCE, so buying them is not preferable. It's why rental stores did so well in the 80s and 90s.

Quote:

Originally Posted by user23

you have 30 days to watch the movie...once played, you have 24 hours to complete viewing. Hardly a limiting model given how most people rent movies. I suppose it's not as free as the netflix model (keep it until you return it)...but this is very similar.

But in some ways it's more free as you don't have to wait days between ordering movies and them arriving and can take as many with you on a trip.

Quote:

also, what do you mean "not being able to put it on both the Apple TV and iPod"? The movie rental concept demoed (maybe I'm wrong here) via Take 2. And, I think I remember Jobs saying that you _can_ transfer the video to any current generation iPod/iPhone.

You are not wrong. The only way you can't move a rented video from the AppleTV is if it's HD. You also can't rent an HD movie from within iTunes. I suspect the reason for this is too keep these customers from trying to get out ncnompatible files on there iDevices and then bitching when they realize that the kbps are too large for the small processors to handle.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

In my area many grocery stores have had rentals for $1-2 each for nearly a decade. My point is why must we accept that a movie rental should cost $3-4 from an online store? They do not have the same overhead costs of a retail establishment, no inventory to worry about and distribution costs are much lower so pass on the savings to the consumer.

And for the same reasons why must my viewing period be limited to 24 hours? What if I want to take my time and watch it over a couple of days? A 24 limit made sense for physical media because they want to maximize their rentals and they are limited by the physical media, but with a digital download they can rent unlimited copies concurrently.

The prices and rental periods are old retail mindset models that, just like the album, need to be broken up.

It appears that I am in the minority but I don't see the benefit of paying $3-4 to rent a movie that has to be watched within 24 hours especially if I want to view it more than once, I may as well pay the $10 and buy it.

Actually, you have up to 30 days to watch it.

Compare that with paying $5.99 (plus the cost of gas) to rent it at Blockbuster and having to return it within either 2 or 7 days, depending on the movie.

$4 and 30 days doesn't sound like such a bad deal.

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13

The analysts should have made a more realistic target around 115 or so for at least the next 6 months. Depending on how bad the recession/depression will be, the target should be adjusted even more.

Fortunately, the real world isn't that pessimistic. That would require Apple stock to drop by more than a third - after a 5 or 6% drop yesterday. It would take far worse economic conditions than we're likely to see for the market to drop that much.

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13

The next analyst who says 'paradigm shift' ought to be taken out the back and shot.

That aside, there are what 7+ million Netflix subscribers. How many people use iTunes to manage their music and video? Who is the biggest download vendor of videos? Who's willing to bet against inertia (If iTunes rentals are available why should I bother learning the Neflix website/platform?) as the single biggest factor that will be responsible for iTunes movie rentals swamping Netflix in the next couple of years?

Blockbuster is dead. Netflix may keep their current subscribers but will have a very hard time attracting new ones. Oh yeah they'll roll out a box built by LG soon. LG, that exemplar of simple, user friendly user interfaces. Not!

You can rent movies at any Redbox for only $1 a night and they are popping up everywhere. You can usually find them outside of McDonalds and inside grocery stores if they are in your area.

The question is, do you think people are willing to get up and drive to the grocery and back twice just to save 2 bucks? Okay so the first trip is for groceries. So one trip to the grocery and back just to save two bucks?

This is a nation of couch potatoes and $2 ringtones. I'm betting Apple wins this calculation. Plus hey, we spew out less greenhouse gases by foregoing those trips.

edit: By the way, where in the world can anyone rent a movie for $1-$2?

I think it's called "Red Box" in my area. I think it's $1/night. But you don't get the 30 days to watch, so iTunes can be a better deal if you might want to wait a few days.

I average less than $2/rental with Netflix and there's no time bomb. I've even kept movies for six+ weeks on two different occasions, one I've watched a couple times, two weeks apart, the marginal cost of that movie sitting around vs. not having that extra would be $5. The same with iTunes would have been $10 because it was an HD movie.

Still, I think 30 days is fine, but only 24 hours to finish might be a bit tough for people. If you start at 8pm one night and can't finish that night, you need to finish it before 8pm the next night. Even 28 or 36 hours would be less of a noose.

Shaw Wu, an analyst with American Technology Research said iTunes Movie Rentals may end up being a bigger deal than some expected.

"On the surface, the announcements look underwhelming and somewhat expected; however, we think when looking back several years from now that the iTunes Movie Rentals announcement will likely end up being a landmark event and potential game-changer," he wrote.

I agree with Wu. I was surprised at the breadth of support Apple gained in the last week or so (all the major studios), but not the depth (that will come). What Apple is doing is laying the infrastructure to support its transition of the ipod (as dedicated MP3 player) into a media player over the next 1-3 years. The impact on the aTV (which will occur) will be en passant until they reach critical mass in titles (maybe a year or two or threee away). But component costs (flash and multi-touch screens for ipods) will also be a gating factor, so I think it will be more like two years before the hardware wow is there to worry about the library.

As for the MBA: why not pay another $200 and get a better spec'ed laptop (larger screen, disk, processor speed)? I carry my 12" Powerbook in a briefcase, and while I was interested in what a light MacBook might offer, it was too little for too much (and I'm glad I work out at the gym).

I average less than $2/rental with Netflix and there's no time bomb. I've even kept movies for six+ weeks on two different occasions, one I've watched a couple times, two weeks apart, the marginal cost of that movie sitting around vs. not having that extra would be $5. The same with iTunes would have been $10.

Still, I think 30 days is fine, but only 24 hours to finish might be a bit tough for people. If you start at 8pm one night and can't finish that night, you need to finish it before 8pm the next night. Even 28 or 36 hours would be less of a noose.

Okay - come clean! Show us the math. Do you work for a living? Do you do nothing at home but watch movies?

Seriously, I have Netflix and a Blu-ray player, and find it very convenient. However, a subscription probably skews the math, because we are motivated to turn them around fast. If I didn't have a subscription, I would probably view fewer movies and watch more HD free content. So the value equation is not straight forward. For instance, renting 2 HD movies/month via Apple TV and watching "free" HD content, compare to 8 Netflix HD movies, and watching less free content. Which is better? Keep in mind the free content may be HD hockey/basketball/nfl/etc. What if I change "free HD content" to going out to dinner with my family (or just my wife???). Having a Netflix subscription somewhat defines what I do with my free time. Renting from Apple removes this type of "constraint".

I haven't worked this through yet for myself, but right now I still have Netflix. What about anybody else - is there really a "subscription tyranny" that consumes our free time?

-JD-- "If Apple wasn't so greedy, they would build G6's and give them away!"

Still, I think 30 days is fine, but only 24 hours to finish might be a bit tough for people. If you start at 8pm one night and can't finish that night, you need to finish it before 8pm the next night. Even 28 or 36 hours would be less of a noose.

While almost all of the people renting will surely fall into the category who watch a movie all at once, I do like the idea of 36 hours so you can continue a second night if need be. Blockbusters new movie rentals are two days, but that isn't 48 hours because they are due my noon on that 2nd day, and if you rent them at night you have as little as 35 hours to get it home watch it and have it returned. But that is a good measure since you can hold onto an iTS rental for 30 days. The only think that I think will eventually change is when new movies become available on iTS.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

Okay - come clean! Show us the math. Do you work for a living? Do you do nothing at home but watch movies?

Seriously, I have Netflix and a Blu-ray player, and find it very convenient. However, a subscription probably skews the math, because we are motivated to turn them around fast.

Not for me. It's $16/mo for three out. If I watch one movie on Friday night and one on Sunday afternoon/night, that's 8 movies a month, making it to $2/movie. I guess I really don't go much lower than that, but if I did the 2-out plan, watched two movies a weekend and one TV series DVD during the week, that's close to $1/disc, though that's really pushing it given the turn-around time.

Quote:

I haven't worked this through yet for myself, but right now I still have Netflix. What about anybody else - is there really a "subscription tyranny" that consumes our free time?

That's not really a problem for me. On some weekends, I don't watch anything at all, depends on how busy I am, but other weekends, it might be three movies, my free time can vary a lot depending on what I feel like doing and what's available.

If I only watched 4 movies a month in HD, Netflix would be a better deal, and that's about my minimum.

Fortunately, the real world isn't that pessimistic. That would require Apple stock to drop by more than a third - after a 5 or 6% drop yesterday. It would take far worse economic conditions than we're likely to see for the market to drop that much.

These things don't happen overnight. The NASDAQ is down 10% since the beginning of this year. We're starting to get some really bad data from the housing markets, financial markets, job markets, industry production, inflation rate. It's starting to sink in for the most part, and there really are not any good news items to buoy the sinking ship.

Also keep in mind that AAPL increased 70% last year. One third doesn't seem that far to fall.

Fragmentation is not just something we have to acknowledge and accept. Fragmentation is something that we deal with every day, and we must accept it as a fact of the iPhone platform experience.

While almost all of the people renting will surely fall into the category who watch a movie all at once, I do like the idea of 36 hours so you can continue a second night if need be.

Most of the time, all at once should be fine, but I've had to stop on occasion due to other things, getting a phone call to do somthing or someone watching doesn't want to finish it, so I'd have to finish it later.

I'm curious why you think this? Blockbuster's Total Access program is very comparable to NetFlix (if not better IMO). I like the fact that you can return a movie you received in the mail to a Blockbuster location and get a free in-store rental. That way you have another movie to watch while waiting for the next one in the mail to arrive.

I typically rent 4-5 movies a month at only $12.99 a month, it appears to be cheaper for me to stick with Blockbuster than move to iTunes Movie Rental.

I'm curious why you think this? Blockbuster's Total Access program is very comparable to NetFlix (if not better IMO). I like the fact that you can return a movie you received in the mail to a Blockbuster location and get a free in-store rental. That way you have another movie to watch while waiting for the next one in the mail to arrive.

Blockbuster is/was a better deal assuming you get equal service, though they did later restrict the number of in store return/rents, I forget what they called it. They weren't a factor as the nearest BB is too far away for me.

In my area many grocery stores have had rentals for $1-2 each for nearly a decade. My point is why must we accept that a movie rental should cost $3-4 from an online store? They do not have the same overhead costs of a retail establishment, no inventory to worry about and distribution costs are much lower so pass on the savings to the consumer.

And for the same reasons why must my viewing period be limited to 24 hours? What if I want to take my time and watch it over a couple of days? A 24 limit made sense for physical media because they want to maximize their rentals and they are limited by the physical media, but with a digital download they can rent unlimited copies concurrently.

The prices and rental periods are old retail mindset models that, just like the album, need to be broken up.

Grocery stores aren't making money on those rentals. Indeed, they may be losing money on them. They are called "loss leaders". They draw you into the store, where you then (or at least most people) buy other products from which they DO make profit.

Walmart does this with DVD sales. They really don't care that much about the sales, but they do care about the people they bring into the isles.

With respect to AIR that is. I still can't get the hardware to jive with the price being asked and likely never will. It is good to know that the people being paid to think about these sorts of things see problems with AIR also.

If nothing else maybe this will drive Apples stock back down to around $65!

While almost all of the people renting will surely fall into the category who watch a movie all at once, I do like the idea of 36 hours so you can continue a second night if need be. Blockbusters new movie rentals are two days, but that isn't 48 hours because they are due my noon on that 2nd day, and if you rent them at night you have as little as 35 hours to get it home watch it and have it returned. But that is a good measure since you can hold onto an iTS rental for 30 days. The only think that I think will eventually change is when new movies become available on iTS.

More often than not we can watch a movie straight through, but it's actually fairly often that's not possible. I can tell you folks are all either young, single, dincs or older/retired. Anyone with children understands how often you're interrupted and/or someone falls asleep, etc. Heh. Anyway, 24 hours is a deal-breaker.

Like a couple others said here, even 36 hours would make a world of difference. On the other hand, it's very likely that Apple didn't make that call, rather the movie distributors pushed for that limit.

Grocery stores aren't making money on those rentals. Indeed, they may be losing money on them. They are called "loss leaders". They draw you into the store, where you then (or at least most people) buy other products from which they DO make profit.

I can see it doing well enough though, depending on how it's set up and the amount of rents it gets. It doesn't need the floor plan or the staffing of a huge Blockbuster store. The system that's in use in my area seems to be managed by a third party, kind of like a vending machine, in size and automation.

The machine has its own credit card swipe system, and the machine has mechanisms and disc label scanners to manage returns so the store staff shouldn't have to touch anything about it, a return is automatically accepted and reinserted into the catalogue.

I can see it doing well enough though, depending on how it's set up and the amount of rents it gets. It doesn't need the footprint or the staffing of a huge Blockbuster store. The system that's in use in my area seems to be managed by a third party, kind of like a vending machine, in size and automation.

The machine has its own credit card swipe system, and the machine has mechanisms and disc label scanners to manage returns so the store staff shouldn't have to touch anything about it.

Cringley has talked about this before. I think it's inevitable that we'll see iTunes kiosks eventually. I think Airports make the most sense for its induction.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

In my area many grocery stores have had rentals for $1-2 each for nearly a decade. My point is why must we accept that a movie rental should cost $3-4 from an online store? They do not have the same overhead costs of a retail establishment, no inventory to worry about and distribution costs are much lower so pass on the savings to the consumer.

And for the same reasons why must my viewing period be limited to 24 hours? What if I want to take my time and watch it over a couple of days? A 24 limit made sense for physical media because they want to maximize their rentals and they are limited by the physical media, but with a digital download they can rent unlimited copies concurrently.

To address both of your points, it's because the movie studios set the terms, and they have more control over digital rentals than sending out discs. You may not want to accept it, but if the movie studios dictate a price of $2.99 (likely because they want $1.99 or more per viewing), none of the download services have much of a choice.

Rental of physical discs can be much cheaper just because they have the option of buying the disc and not paying a per-view royalty. If they buy a movie for $15, they can charge a buck per rental and they're in the black once they've rented it fifteen times. For a download company, it's flat out impossible to compete with that pricewise.

And what kind of selection does your grocery store have for a buck a rental? 1000 titles like the iTunes store will have by the end of februrary? I doubt it.

Quote:

Originally Posted by runnerxt2001

You can rent movies at any Redbox for only $1 a night and they are popping up everywhere. You can usually find them outside of McDonalds and inside grocery stores if they are in your area.

And how many titles do they have to choose from on a given night (assuming the titles are even in stock)?

I can see it doing well enough though, depending on how it's set up and the amount of rents it gets. It doesn't need the floor plan or the staffing of a huge Blockbuster store. The system that's in use in my area seems to be managed by a third party, kind of like a vending machine, in size and automation.

The machine has its own credit card swipe system, and the machine has mechanisms and disc label scanners to manage returns so the store staff shouldn't have to touch anything about it, a return is automatically accepted and reinserted into the catalogue.

Do you know how much those machines cost? It would take a LOT of rentals at $1 , or even $2, to make it up to the company that's putting it out there. If, instead, the store is leasing it, it would cost a lot for the store.

We had a machine like that at my lab, except it made prints that a customer could do themselves. It looked good on paper, but never made a profit for us, or the company we leased it from. We weren't the kind of lab that needed to lure people in, as we were mostly pro, so we had them take the machine back after almost a year of bother.

Cringley has talked about this before. I think it's inevitable that we'll see iTunes kiosks eventually. I think Airports make the most sense for its induction.

It might work better for digital files, if they can figure out how to manage it. Would the customer need to bring their own media? Or would it actually have the movies on something? I don't see that as an answer. The idea would be to make the machine as cheap as possible, but it would need to have all the files on some huge built-in file server. I don't know. Maybe sometime in the future.

It might work better for digital files, if they can figure out how to manage it. Would the customer need to bring their own media? Or would it actually have the movies on something? I don't see that as an answer. The idea would be to make the machine as cheap as possible, but it would need to have all the files on some huge built-in file server. I don't know. Maybe sometime in the future.

I thought of airports for a few basic reasons: High rate of traffic, premium pricing, & flying is dull.

I was thinking a the large server that only holds the latest movies, TV Shows and, perhaps, music, though music files are small enough that they could be streamed from the iTunes main servers.

I was thinking of an iPod dock for iDevices and a USB port for notebooks.

The notebooks would have to be running iTunes, of course, By plugging into the USB cable and opening up iTunes it would auto-sense the signal it was receiving and take you a special store that had only the items in that kiosk. It would then function just like the iTunes Store.

For iDevices, it would have to be different, but trying to maintain the iPod as a dumb device i came up with following:. I can't imagine having a mini iTunes on the iPod to verify one's account, so instead you would directly use a credit or debit card scanner to pay for media. It would then determine if you have enough space on your device before uploading. Rental items will expire as normal and purchased media will upload back to your iTunes account the next time you sync up. Since the iPod can't do this maneuver it would be easier for the purchased items to have a specific tag attached to them that tells iTunes to pull the purchased and rented media back to the PC/Mac.

This would be easier to do with iDevices as the kiosk space would take up considerably less room than a notebook, you can easily charge them while they are docking and uploading, and potentially offer much smaller rental sizes that would sync much faster.

The problem with notebooks is that doing a sync, even if it is only 10 minutes, over USB for a movie would mean that a power source may need to available. a dying battery is disastrous in an airport and outlets are hard to come by—I bring a travel power supply with me just so I squeeze into a used outlet—but then people may decide to loiter ther to charge their machine. My resolution is that the outlet would only be powered when the download process started.

Just a thought...

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

I thought of airports for a few basic reasons: High rate of traffic, premium pricing, & flying is dull.

I was thinking a the large server that only holds the latest movies, TV Shows and, perhaps, music, though music files are small enough that they could be streamed from the iTunes main servers.

I was thinking of an iPod dock for iDevices and a USB port for notebooks.

The notebooks would have to be running iTunes, of course, By plugging into the USB cable and opening up iTunes it would auto-sense the signal it was receiving and take you a special store that had only the items in that kiosk. It would then function just like the iTunes Store.

For iDevices, it would have to be different, but trying to maintain the iPod as a dumb device i came up with following:. I can't imagine having a mini iTunes on the iPod to verify one's account, so instead you would directly use a credit or debit card scanner to pay for media. It would then determine if you have enough space on your device before uploading. Rental items will expire as normal and purchased media will upload back to your iTunes account the next time you sync up. Since the iPod can't do this maneuver it would be easier for the purchased items to have a specific tag attached to them that tells iTunes to pull the purchased and rented media back to the PC/Mac.

This would be easier to do with iDevices as the kiosk space would take up considerably less room than a notebook, you can easily charge them while they are docking and uploading, and potentially offer much smaller rental sizes that would sync much faster.

The problem with notebooks is that doing a sync, even if it is only 10 minutes, over USB for a movie would mean that a power source may need to available. a dying battery is disastrous in an airport and outlets are hard to come byI bring a travel power supply with me just so I squeeze into a used outletbut then people may decide to loiter ther to charge their machine. My resolution is that the outlet would only be powered when the download process started.

Just a thought...

That's somewhere about what I was thinking. the problem is that the download to the device would have to be quick. It couldn't take ten minutes. Paying through an iTouch, or iPhone wouldn't be a big deal. Apple would have to implement it. This is what they do in Japan and S Korea now. They pay for almost every little automated purchase with their phones.

It was even a question as to whether the iPhone would sell there because of the lack of that ability.

That's somewhere about what I was thinking. the problem is that the download to the device would have to be quick. It couldn't take ten minutes. Paying through an iTouch, or iPhone wouldn't be a big deal. Apple would have to implement it. This is what they do in Japan and S Korea now. They pay for almost every little automated purchase with their phones.

It was even a question as to whether the iPhone would sell there because of the lack of that ability.

I was using a scenario where someone would be ordering many items. I certainly know I would. Takes me about a minute to copy a 1.5GB iTS movie between HDDs over USB2.0.

I wasn't thinking of paying via the iPhone/iPod Touch, I was talking about a separate card swipe, like at a gas station pump or ATM. But I like your idea, but can the American people handle it?

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

Most people watch a film ONCE, so buying them is not preferable. It's why rental stores did so well in the 80s and 90s.

But in some ways it's more free as you don't have to wait days between ordering movies and them arriving and can take as many with you on a trip.

You are not wrong. The only way you can't move a rented video from the AppleTV is if it's HD. You also can't rent an HD movie from within iTunes. I suspect the reason for this is too keep these customers from trying to get out ncnompatible files on there iDevices and then bitching when they realize that the kbps are too large for the small processors to handle.

Dude- do you ever disagree with anything Apple puts out? You must be paid by Apple.

you have 30 days to watch the movie...once played, you have 24 hours to complete viewing. Hardly a limiting model given how most people rent movies. I suppose it's not as free as the netflix model (keep it until you return it)...but this is very similar.

also, what do you mean "not being able to put it on both the Apple TV and iPod"? The movie rental concept demoed (maybe I'm wrong here) via Take 2. And, I think I remember Jobs saying that you _can_ transfer the video to any current generation iPod/iPhone.

edit: By the way, where in the world can anyone rent a movie for $1-$2?

Down here in Aust we only pay $1.95 per movie for new releases for 24hr

Apple TV/iTunes movie rental doesn't look like a big deal, but it will be a quarter to half of Apple's revenue in 5 years.

Apple is all about making is simple. There is no simpler way to rent a movie than Apple TV. Yes, I will get one. $3/$4 may sound more expensive, but it is not.

1. Comparing to physical DVD rentals, think about the gas and time saved (for two trips). I will be glad to pay $2 extra to save 30 minutes!

2. Comparing to Netflix DVD's...are you kidding me? The best thing about Netflix is its free trial. Once you becomes a paying member, the DVD delivery became so slow that sometimes I had to wait for one week for my DVD's, and usually I don't get the top choices. It seems Netflix gave free trial members higher priorities. I have used their free trial twice, and became paying member twice, with the same result.

3. Comparing to Netflix online - the 6000 titles on Netflix is just not enough, and no new releases, no TV shows, and not even all the good old releases. And who wants to watch a movie on a computer screen anyway? (except computer nerds) Also, again, think about time saved. How long does it take to get a movie ready to play on Netflix?

Count my words....Netflix (and BlockBuster) will be in big trouble...Will either be sold or go out of business in the next five years. Microsoft will soon (in two years) offer something similar to iTunes movie rental on XBox. When we look back five years from now, iTunes movie rental/Apple TV 2.0 will be the defining moment of this MacWorld Expo.

2. Comparing to Netflix DVD's...are you kidding me? The best thing about Netflix is its free trial. Once you becomes a paying member, the DVD delivery became so slow that sometimes I had to wait for one week for my DVD's, and usually I don't get the top choices. It seems Netflix gave free trial members higher priorities. I have used their free trial twice, and became paying member twice, with the same result.

It sounds like you just had some bad luck. I've had some delays with netflix, but the vast majority of the time I still get a movie two business days after I put it in the mail. Even at a week per delivery, on the 3 plan that's 12 movies per month for $17 or whatever.

I don't really see netflix and things like iTunes as direct competitors (yet). Each has advantages and disadvantages, and I don't see NF dying too soon.

But download services have room to improve while snailmail ones are about as good as they can get. Assuming the studios cooperate, apple can vastly increase their selection. And in the future, it's possible that they could get the studios to agree to a subscription plan (is any download service doing a subscription plan with a decent selection?). If those things happen, it will put more pressure on netflix, and eventually they could become obsolete.

2. Comparing to Netflix DVD's...are you kidding me? The best thing about Netflix is its free trial. Once you becomes a paying member, the DVD delivery became so slow that sometimes I had to wait for one week for my DVD's, and usually I don't get the top choices. It seems Netflix gave free trial members higher priorities. I have used their free trial twice, and became paying member twice, with the same result.

I am a subscriber, and I think your experience might be an outlier. It might vary by region, it can vary based on what title you want, but most of my stuff is one day there, one day back.

Fortunately, the real world isn't that pessimistic. That would require Apple stock to drop by more than a third - after a 5 or 6% drop yesterday. It would take far worse economic conditions than we're likely to see for the market to drop that much.

AAPL was just at $118. Pretty close to my price target, if I may say so.

Fragmentation is not just something we have to acknowledge and accept. Fragmentation is something that we deal with every day, and we must accept it as a fact of the iPhone platform experience.